Which Best Defines the Gross Requirements for a Component Item

question 120

Multiple Choice

Which best defines the gross requirements for a component item?

• A) the forecasted customer demand for the component
• B) the amount of safety stock needed to buffer against uncertainties
• C) the sum of gross requirements for all parents of the component
• D) the total demand for the component derived from all immediate parents

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Definitions:

Prepaid Expenses

Assets on the balance sheet representing services or goods paid for upfront but not yet consumed.

Indirect Method

A technique used in cash flow statement preparation, adjusting net income for changes in non-cash accounts to arrive at operating cash flow.

Net Income

The net income a company earns once it has subtracted all costs and taxes from its revenues.

Operating Activities

Activities related to the primary operations of a company, including cash flows from sales, supply purchases, and payroll.